Measuring Performance In the Digital Industry: OKRs

They say if you can’t measure it, you can’t improve it, and this couldn’t be more true when it comes to the digital industry. Numbers and data are crucial information and key performance indicators – they have an important story to tell, which we can then use to paint a larger picture.

So, it goes without saying that measuring performance is vital for success in digital, as well as in any other industry. However, you need to know where you’re headed in order to get there. And that’s exactly where OKRs – the crucial pieces of the business success puzzle – come into play.

Learn everything you need to know about OKRs and how to use them to elevate your digital strategies to new heights with our beginner-friendly yet comprehensive guide.

Learning the Ropes: What are OKRs?

OKRs, or objectives and key results, are a staple goal-setting and tracking technique invented by Andrew Grove and used by many tech giants and digital natives like Google, Intel, and Amazon. Many smaller organizations worldwide are looking to implement this innovative goal-setting system as they need to be more agile than ever to win in the global marketplace.

OKR is defined as a performance management framework designed to encourage companies and teams (large and small) to set clear, measurable goals and effectively work, communicate, monitor, and measure their progress towards them.

Objectives and key results, the two primary components of the OKR methodology, are the yin and yang of goal setting – objectives define where you want to go, while key results are the success measurement of those objectives. Let’s break it down.

Objectives Vs. Key Results (With Examples)

Objectives are qualitative, inspirational, time-bound, and ambiguity-free goals to be executed by a corporation, team, or an individual, while Key Results (KR) quantify those objectives and break them down into specific metrics that can be used to measure their achievement.

An organizational Objective is your North Star – a concise, clear goal you hope to accomplish in the future that everybody can understand. It tells you where you’re going by pinpointing the destination you’re all headed to. A Key Result, on the other hand, is like a signpost that tells you how close you are to getting there – a measurable outcome you need to deliver to reach your destination you can also use to measure your progress towards it and keep your eyes on the prize.

For example, a measurable objective would be to increase profit by 30% until the end of the business quarter, while key results related to achieving that objective would be to, for example, reduce production costs by 20% and hire ten people to improve social media engagement by the end of the business quarter.

Why Are OKRs Important?

A Japanese proverb states: “Vision without action is a daydream. Action without vision is a nightmare.” In other words, without a clear goal in sight, you’ll be forever walking in the dark, not knowing where you’re going, if you’re on the right path to getting there or if you ever even arrived.

Many organizations practice a top-down goal-setting system and, thus, either a) end up getting stuck in the phase of figuring out what goals to set rather than moving through to achieving them or b) scatter their goals all over the place, losing sight of what’s really important and wasting time, money and energy on unclear goals or goals not even worth pursuing.

Objectives and Key Results (OKRs) offer an effective alternative as they are clear vessels for keeping priorities and insights straight. OKRs are simple yet powerful and can be used by startups and large corporations to execute their strategies with clear focus and alignment. They’re the secret sauce for business success.

A Framework for Hypergrowth: Key Benefits of OKRs

The breathtaking advantages of implementing the OKR process are apparent, given the impressive roster of leading companies that have used them to astounding success, from the ones in the banking industry to search engines and digital marketing agencies.

Still not convinced? Read on to see how OKRs can make an unparalleled business impact on your company’s performance, whatever your niche.

1. Unity in Focusing on What Matters

If we try to focus on everything, we focus on nothing. Having clear goals in place improves performance – by clearing the line of sight to everyone’s objectives, OKRs expose redundant efforts and save time and money, allowing organizations and teams to home in on work that’s truly important and be equally clear on what doesn’t matter.

Having a simple, clear, and outcome-driven focus teaches your team to be result-oriented and ensures that everyone is moving in the same direction. It helps individuals prioritize their day-to-day activities by focusing on what really matters, understanding how their work contributes to the bigger picture, and having the freedom to decide which actions are more likely to deliver the desired outcomes they’re striving to achieve on an individual level.

2. Transparency and Increased Employee Engagement

Transparency and team alignment come from meaningful discussions led by the OKR process that connects team-level and individual goals and activities with the entire company’s main objective and mission. Since OKRs are open and visible to the entire organization at each level of every department, and everyone is tracking toward the same goals, companies that use OKRs operate as cohesive business units.

With regular check-ins, feedback, continuous learning, collaboration, and problem-solving, OKRs are an amazing way to nurture healthy work relationships and connect ideas, which leads to effective communication and improved productivity organization-wide. When everyone is moving forward together, success takes care of itself.

It also helps team members feel like they’re personally contributing to a higher purpose and a grand common goal, thus, increasing their engagement and motivation, which results in higher employee satisfaction and productivity.

3. Flexibility & Insights You Can Rely On

Change is the only constant, and OKRs help with just that. Unlike traditional long-term strategic planning, OKR methodology is designed to set shorter and quantifiable business objectives and key results, which allows for swift adjustments and adaption to change.

This way, any challenges you might face down the road threatening to derail you from accomplishing your objectives can be solved early on, allowing you to change the course until it’s too late so that the long-term goal is still achievable.

Since key results are designed to be measurable, progress can be easily evaluated at any point. What’s even more important it gives you reliable insights and data you can trust to give you a sense of direction and point you the right way. After all, they’re called key performance indicators for a reason.

How to Set OKRs Successfully: Objectives & Key Results Best Practices

Most importantly? OKRs drive results. If your organization is looking for a way to set clear and prospective business goals, you might want to consider tapping into the OKR framework. Luckily, as Digital Marketing Agency, we ourselves use the OKR methodology as part of our corporate strategy to reach new digital heights and stand out as industry leaders.

So, here are a few insider tips and tricks to help you do the same and turn the OKR approach into a powerful personalized business weapon:

1. Choose the Right Objectives – Shoot For the Stars

Objectives should be short, motivating, and memorable statements everyone should understand and recall easily. Start by singling out improvement areas for the quarter – you can either identify what needs fixing or brainstorm ideas for doing things in an innovative way. Keep in mind that team OKRs should align with the organizational objectives and contribute to creating a unified direction and understanding of the main goal.

However, don’t be too modest when picking your battles – think big. Although highly lucrative, OKRs have a 70-80% average success rate. Why? Because the OKR framework allows for setting ambitious goals, sometimes referred to as “stretch goals” or “Moonshot Objectives.”

Leaders realize that these goals might not always be achievable, but it motivates individuals to think outside the box and beyond the threshold of what seems possible, and thus, sometimes achieve beyond expected. If you’re achieving all your goals, you’re not setting them ambitiously enough!

2. Measure What Matters

If you torture data long enough, it will confess to anything. The ultimate goal of measuring performance is to turn data into information and information into insight. So, your Key Results must be measurable as they are your key performance indicators.

To get the most out of the OKR method, an Objective should have 3 to 5 Key Results defined based on the objective and set for each team or company level to make them attainable. They should also be time-bound to ensure everyone completes them in the designated period of time.

It is okay to only achieve 60-70% of your OKRs – never get discouraged by unsatisfying results. You can’t measure success if you have never failed, and thanks to OKRs’ short-term cycle times, you can use it to change your approach and get a step closer to success and reaching your Objective.

3. Initiate Action Accordingly

Since Objectives and KRs are not activities but the desired outcome, you need initiatives and actionable plans for putting them into motion and driving them. Ask yourself what you need to do to get to your destination – then create initiatives that clearly describe what projects and tasks everyone needs to do to achieve the Key Results and, ultimately, reach the Objective.

4. Chek-In and Follow-Up Regularly

Follow-ups should be used to continuously evaluate your metrics and see if your key results are too complex or too simple so you can update them if necessary. Chek-ins can be done at any frequency that works for your team; however, it’s best to have them weekly.

You can also manage your OKRs in an OKR tool or software to transparently track them within the organization. Monitoring and iterating the OKR progress on a regular basis contributes to its success.

Radical Focus: Achieving Your Most Important Digital Goals with Objectives and Key Results

No one can whistle a symphony – it takes a well-coordinated orchestra to play it. OKRs give organizations and teams the framework and tools they need to work together toward a common vision – they direct individual accomplishments toward united and ambitious goals on the organizational level. They are the fuel that drives ordinary people to achieve extraordinary results.

Some of the most successful companies of our time rely on the OKR methodology. So, why not use the power of this success-oriented hypergrowth framework to reach your business goals, create a bullet-proof company strategy and skyrocket your organization to the very top?